Treasury yields are sinking after the jobs report

Treasurys are rallying after the disappointing May jobs report. The US economy added 138,000 nonfarm jobs, missing the 182,000 that economists were anticipating. Additionally, the unemployment rate fell to a post-recession low of 4.3%. The post-data bid has yields across the curve down as much as 5 basis points. Here’s a look at the scoreboard as of 8:48 a.m. ET:

  • 2-year -2.4 bps @ 1.266%
  • 3-year -3.8 bps @ 1.399%
  • 5-year -5.6 bps @ 1.705%
  • 7-year -5.5 bps @ 1.964%
  • 10-year -5.6 bps @ 2.156%
  • 30-year -4.8 bps @ 2.814%

Friday’s buying has yields at the long end of the curve flirting with their lowest levels since Donald Trump’s election victory. Those yields rallied sharply in the weeks following the electionamid speculation Trump’s plans to cut taxes and spend on infrastructure would bring back inflation to the US.

However, Trump has been unable to get his ideas to pass Congress and that has tempered expectations that his agenda is going to get done. After topping out near 2.64% in March, the benchmark 10-year yield is sitting at its lowest level since November 10, two days after the election.

Friday’s action has had little impact on the yield curve as the 5-30-year spread holds at 110 bps, its flattest since early April.

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